Why Some Blockchain Projects Hit A Roadblock
Blockchain was supposed to help run your business smoothly, but it failed to take off in some cases. The issue wasn’t with the technology itself, but with how it was applied.
The Gist
- Organizations struggle with adopting new systems and redefining workflows.
- Failures often stem from introducing blockchain in already efficient areas.
- Successful adoption requires training and a focus on user-friendly applications.
In a recent LinkedIn post, Phil Le-Brun, director of enterprise strategy at Amazon Web Services, wrote:
“Remember when blockchain was going to change the world? We were told it would transform every industry. But ask a room of 300 executives today how many actually did, and maybe one hand goes up. Usually someone in logistics. So, are you evolving fast enough to usher in this next era of transformation? That’s something to consider.”
Le-Brun’s reflection captures a ground reality: blockchain has not been adopted as widely as initially believed.
Sectors such as logistics and finance have seen some good progress, but many are still figuring out where and how the technology fits.
There is another category of blockchain users — the overzealous ones — who tied themselves up in knots by being too aggressive with its adoption. Eventually, they had to drop the whole idea.
As a result, the technology, which could have solved some of their problems, did not solve any.
All-Or-Nothing Mindset
One key reason blockchain hasn’t taken off as quickly as many expected is because a lot of early projects were built with an all-or-nothing mindset: decentralising every part of the business.
That may have sounded like a big change at all levels, but it failed primarily because most people didn’t know how to use the new system.
According to Prof Nikhil Varma of blockchain platform Algorand, plenty of these systems were designed beautifully, but mostly for people who already understood how blockchains worked. For others, it did not feel natural or easy. The technology was not at fault; it's the people who could not keep up with it.
Another aspect of the problem was that the technology was introduced in areas where the existing systems were working flawlessly.
As a result, performance did not improve at all. In fact, things became more complicated, resulting in the abandonment of the technology even in areas where it could have worked.
That’s what happened with the Australian Securities Exchange (ASX), which wanted a better alternative to its clearing and settlement system. The exchange went on to dedicate seven years and about $250 million to build a blockchain platform.
The project was abandoned in 2022 after repeated delays, triggering criticism of ASX from the banking industry, government, and Australia’s central bank.
An independent review also found that the system was way too complex and did not even align with user needs. In 2024, the Australian regulator even sued ASX over a botched blockchain upgrade.
The main issue, Varma said, isn’t the tech: it’s how we approach it.
Let’s take another example:
Civil Media Company tried it with journalism. Their plan was to get readers to buy tokens to read articles on its website. Eventually, the company shut down in 2020 because readers found it too complicated to buy tokens just to read an article. Even journalists couldn’t figure out how blockchain would fit into their work.
Many early blockchain builders were mistaken in their assumption that users would be willing to reinvent the wheel with proper training. But the ground reality was different. People wanted something simple and also user-friendly.
“For every success story, countless blockchain projects have faltered or failed,” Varma said in a post on Crypto India Magazine.
Bridging Trust Gap
A key USP of the blockchain technology is the way it decentralises the operations. Some companies took it a bit too far. They became obsessed with the idea of decentralisation, and ended up directionless.
For every big decision, they started turning to core developers or big investors. That was exactly the opposite of decentralisation.
It happened with TradeLens, a blockchain-based supply chain platform jointly developed by IBM and shipping giant Maersk.
The goal was to get all shipping and trade documentation online and make the system decentralised. But it was shut down in 2022 because the ecosystem didn’t scale. Many shipping companies and platform users saw it as a project where Maersk had all the controls.
So where do you really use this tech in your business?
An easy way to know where blockchain could be useful is to ask: is there an area in the business where trust is in short supply? That’s your way in.
When there’s a trust gap — in supply chain, digital identity, or cross-border payments — blockchain will bridge it.
Final Words
Let’s be mindful of the fact that the biggest challenge isn’t technology; it’s people who have to operate it. Most organisations aren’t equipped to start using something totally new.
Adopting blockchain essentially means redefining how teams work, updating systems, training people, and getting everyone to agree to the changes. That kind of switch-flipping cannot happen overnight. It takes time.
So, no, it’s not a magic fix. But it’s a powerful tool, which is gradually finding its place.
It’s unlikely that everything will be on blockchain in the future. But the lessons that have come from failed projects will make it a much more efficient tool.
This series is brought to you in partnership with Algorand.
